Finance Act 2015

FA15/S25

What changes were made?

FA15/S25 limited the circumstances to which the rules apply. It also made a similar limitation to the categories of connection to which the late interest rules (CFM35800) at CTA09/S373 apply for loan relationships.

The late paid interest and deeply discounted security rules were originally introduced to counter tax asymmetries between the lender and borrower to a loan. However, these provisions have been deliberately exploited by some companies to increase the amount of tax relief they can obtain for interest expense.

The special rules for deeply discounted securities originally applied where:

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